AML/CFT oversight of - PowerPoint Presentation

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AML/CFT oversight of distribution channels

KLP, Bjørvika 24.11.2016Line Augeli, Pareto Asset Management ASSlide2

Pareto Asset Management ASKonsesjoner: Fondsforvaltning, forvaltning av alternative investeringsfond og aktiv forvaltning.

Hovedkontor i Oslo og filial i Sverige.Eies av ansatte og Pareto AS v/Svein Støle.55 ansatte, hvorav 2 på compliance og 1 på risk.

Forvalter fond hjemmehørende i Norge, Luxembourg og Irland – totalt ca. 40 milliarder. Direktesalg og tredjeparts distribusjon.

VFF

Complianceseminar

2016

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Verdipapirfondforskriften§ 2-5.Melding om

utkontrakteringVerdipapirfondforskriften Kapittel

13. Hvitvaskingsloven § 5. Risikobasert kundekontroll

CSSF Regulation 12-02

Enhanced

level

of

due

dilligence must be performed on all third party distributors. The final responsibility of AML/CFT lies with the investment funds or their management companies. Investment funds and management companies must ensure that third party distributors have AML measures in place equivalent to those in Luxembourg. Kilde: PwC Luxembourg

Norge? Europa? Luxembourg?

“AML Distributor Due Diligence: it’s not an option – it’s an obligation”

VFF Complianceseminar 2016

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Companies subject to financial supervision in EU/EEA or equivalent country.

Companies subject to financial supervision in a country outside EU/EEA or equivalent country.

Companies in high-risk and non-cooperative jurisdictions.

Non-regulated entity i.e. introducing broker etc.

Companies in jurisdictions subject to international sanctions – sanctions must be analysed.

The company is subject to investor alerts.

The company does not engage in sub-distribution.

The company has sub-distributors within its group belongings.

The company has sub-distributors.

The company has several layers of sub-distribution.

Risk-

based

AML assessment

The Distributor Sub-Distribution

VFF Complianceseminar 2016

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The Distributor has its main operations in EU/EEA or equivalent country.

The Distributor conducts business outside EU/EEA or equivalent country.

The Distributor conducts business in

high-risk and non-cooperative jurisdictions.

The

fund provider

does not have insight into how the Distributor operates, target markets/clients etc.

The

Distributor conduct business

in jurisdictions subject to international sanctions – sanctions must be analysed.

The Distributors type of business is considered as low risk.The fund provider has insight into how the distributor operates, and their business is of ordinary art.The fund provider does not have insight into how the distributor operates.

Risk-

based AML assessment

Place of business Type of business

VFF Complianceseminar 2016

| 5“The Distributor” includes branches, subsidiaries

and sub-distributors. Slide6

Distributor acting as nominee.

Third party nominee, which the fund provider has a close business relationship with.

Distributors

acting in its own name (fund-of-funds or the custodian of the fund).

Distributor acting in its own name as insurance undertaking.

Third party nominee.

Settlement through a bank in in EU/EEA or equivalent country.

Settlement through a bank outside EU/EEA or equivalent country.

Settlement through a bank

in high-risk and non-cooperative jurisdictions. Third party receivers of payment (other than Distributor in case of third party nominee).

Transactions with Shell Banks.

Risk-

based AML assessmentCustody

SettlementVFF Complianceseminar 2016

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Risk-based AML assessment

Simplified assessment: All green elements.

Internal

assessment

annually

.

Standard assessment: No orange or red elements.

Internal

assessment annually. Standard Due Diligence Questionnaire is sent every 2 year.Standard plus risk assessment: No red elements.

Internal

assessment annually

. Detailed due Diligence Questionnaire is sent every year.

Enhanced risk assessment: Any red elements require clearance from compliance and CEO, unless red elements is de facto not high risk.

Internal assessment annually

. Detailed Due Diligence Questionnaire is sent every year.Any grey elements, suggests a distribution agreement should not be entered into.

Level

of

due

dilligence

VFF

Complianceseminar

2016

|

7Slide8

Vedlegg

Tilleggsinformasjon for spesielt interesserteSlide9

Sourceshttps://www.iosco.org/investor_protection/?

subsection=investor_alerts_portalhttp://www.esma.europa.eu/page/Investment-FirmsThird country equivalence (Common understanding between

Member States 2012): Australia, Brazil, Canada, Hong Kong, India, Japan, South Korea, Mexico, Singapore, Switzerland, South Africa, The United States of America.

High-risk and non-

cooperative

jurisdictions

(FATF): Afghanistan, Bosnia Herzegovina, Democratic People’s Republic of

Korea, Iran, Iran, Lao

People’s

Democratic Republic, Syria, Uganda, Vanuatu, Yemen. Sanctions in force by EU: http://eeas.europa.eu/archives/docs/cfsp/sanctions/docs/measures_en.pdfSanctions in force by USA: https://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspxInvestor alerts, third country equivalence and sanctionsSlide10

Luxembourg CSSF Regulation N 12-02

“Where the units or shares of an undertaking for collective investment or an investment company in risk capital are subscribed through an intermediary acting on behalf of his customers, the undertaking for collective investment, its management company, the investment company in risk capital or, where applicable, the respective proxy of the professionals shall put in place enhanced customer due diligence measures for this intermediary which is applied mutatis mutandis pursuant to the terms of Article 3-2(3) of the Law, Article 3(3) of the Grand-ducal regulation and Article 28 of this regulation in order to ensure that all the obligations under the Law, the Grand-ducal regulation and this regulation or at least equivalent obligations are complied with

.”

Chapter 2 Scope,

Article

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